FinTech Fund 2018: Investing in innovation

28 Sep 2018

On 27 September 2018, at an official launch event in London, leading international law firm Simmons & Simmons announced the businesses that will make up the third cohort to receive support from the firm’s FinTech Fund.

The four businesses making up the third cohort operate in the artificial intelligence, insurtech and peer-to-peer fields.

Launched in May 2016, the FinTech Fund was the first programme of its kind to support start-up FinTech businesses through the various legal challenges they can face in their early stages. This year, as in previous years, the firm has set aside £100,000 to help four FinTech businesses through the provision of free legal advice, taking the firm’s total investment in the sector to over £300,000.

“2018 looks likely to prove a milestone year for the UK FinTech sector”, said Angus McLean, partner at Simmons & Simmons and head of the firm’s international FinTech team. “The Financial Conduct Authority’s consultation on the loan-based crowdfunding regime, following the publication of its long-awaited post-implementation review of the UK’s crowdfunding regulations, will have a material effect on the direction of the peer-to-peer industry in the UK. The UK authorities also look poised to intervene in the crypto-asset sector for the first time, with new regulations in that area looking highly likely. Challenger banks and FinTechs focusing on the SME market are also vying for a share of the £775million fund that is now available as a result of the European Commission’s recent approval of the Royal Bank of Scotland’s ‘Alternative Remedies Package’. The appetite of the public markets for the UK FinTech sector is also being tested in earnest for the first time.”

The FinTech team at Simmons & Simmons has chosen four exciting businesses that have the ability to take advantage of these developments and market uncertainties to make a significant impact on the financial services industry. The four winners of the 2018 FinTech Fund are:

Marshmallow: Marshmallow is a purpose-driven, technology-first car insurer that offers fairer prices to one of the most poorly served segments of the market: international drivers. Marshmallow has built a proprietary pricing matrix that uses new data sources and unique rating factors to offer better prices to foreign born drivers, a group of individuals who will often pay 50% more than the average consumer.

Axyon AI: Axyon brings deep learning powered solutions to finance. Axyon collaborates closely with data scientists at the University of Modena in Italy and has built a proprietary platform that provides highly accurate predictive solutions, currently focussed on asset allocation strategies and the syndicated loan market.

EdAid: EdAid is a mission driven financial technology company focussed on increasing access to quality education. EdAid partners directly with universities and professional schools to enable students to ‘study now, pay later’ with an interest free loan.

Nimbla: Nimbla provides micro-insurance that protects small business and caters to the unbundling of financial services. Nimbla offers single invoice credit insurance combined with fraud detection, debt purchase and enhanced recovery, underpinned by data and provided through a platform, app, white-label and API.

“We are absolutely delighted to announce the four winners of our 2018 FinTech Fund and look forward to helping them succeed,” said Angus McLean. “We are at a tipping point in the development of the FinTech industry in the UK. We look likely to see the most significant regulatory changes targeted at the nascent sector to date at the same time as the industry deals with the ongoing uncertainty over Brexit. Against this backdrop, we have selected four exceptional businesses that we believe can thrive in these challenging times for the sector. This includes the first non-UK based FinTech firm to receive support from the FinTech Fund.”

Robert Allen, partner at Simmons & Simmons and this year’s Chairman of the FinTech Fund, said: “We have been impressed with the amount of FinTech entrepreneurial talent in the UK and elsewhere in Europe and would like to thank our partners in the FinTech community for recommending so many excellent businesses. We are confident that the latest cohort can emulate the successes of our previous winners, including BestX who recently announced the first exit for a winner of the FinTech Fund with their acquisition by State Street.”